1/9: Equity “value” (cheapness style factor)…a simple experiment in reframing. Much debate lately about whether value is dead following a decade of deep underperformance. (This question is unanswerable; lots of genuine uncertainty, but…

2/9: …to conclude ‘death’ today would require a level of evidence that hasn’t come close to materializing / see @choffstein’s work.) Confidence in value has become shaky, and pervasive nowcasting has created a dense fog of war on the issue (pls. pardon the metaphor).

3/9: But consider a thought experiment: imagine we’re standing in 2007 after a strong value run. Many (most?) quite rationally are believers, but some question how long value can continue surging ahead. Value spreads are compressed.

4/9: True believers continue to hold through thick and thin; true believers and value tourists, alike, yearn for a more attractive entry point. Now if I (still in 2007 here) asked you to describe your dream entry point, how might you respond?

5/9: You might want to see some combination of…(1) a solid decade of bad relative performance + historically wide valuation spreads; (2) especially sharp recent underperformance; (3) rising frequency of “is value dead?” headlines and narratives;

6/9: (4) talk of “value 2.0” + promotion of GARP; (5) headline risk + disgust/resignation surrounding the names/sectors showing up in ‘cheap’ portfolios; AND, YET, (6) zero evidence that the extent of the underperformance can be justified…

7/9: …by divergences in fundamentals, no matter how you torture the data? (On #6, if you’re not convinced, look no further than @CliffordAsness's recent piece.)

8/9: Finally, (7) an occasional deep fundamental shock to remind us it’s not all behavioral mispricing; there is probably a valid long-term RISK premium as well. (Did I miss anything?) Okay, END of thought experiment…and…

9/9: …if I, The Oracle, had told you (remember--still 2007) that every one of these wishes would come true, in roughly a decade’s time? You would have been salivating. You know you would have. Fast forward to today—are you?